Evergrande Auto plans to list on the Shanghai Star Market. Preparations for the IPO are in progress; they can take between 3 and 12 months to complete. Meanwhile, according to Chinese media, pilot production has started in two Evergrande plants.
After the warning before Liquidity shortages the company is slow to calm down. One thing is certain, there is help at the local and highest levels to stabilize Evergrande. The highly indebted group is representative of the country's real estate sector. Falling real incomes due to the Corona crisis meet building speculation and the displeasure of the central government.
This pulls the reins tighter, limits debt and new borrowing, but at the same time has to ensure stability. At the end of the month, measures to reschedule short-term debt on long-term prescriptions are expected. At the same time, restrictions on the sale of apartments are being relaxed at the local level. This could wash more liquidity into the coffers of real estate companies.
Evergrande Auto plans to go public
To raise capital, Evergande Auto plans to place 1.556 billion shares on the Shanghai Star Market. The preparations for the initial public offering run, it could take anywhere from 3 to 12 months. Evergrande Auto expects revenues of $ 4,7 billion. According to unconfirmed reports, 70% of the proceeds will be invested in research and development and the establishment of the sales network. 30% goes into working capital.
The Shanghai Star Market has increasingly served Chinese automakers and high-tech companies as a platform for raising capital in recent months. Most recently, NIO, Xpeng and Li Auto were able to collect 8 billion US dollars in fresh capital there.
Evergrande Auto isn't the only company suffering from a lack of liquidity. The effects of the corona pandemic are slowly becoming visible in China as well. It also affects companies that are considered to be established. Yesterday, BMW partner Brilliance announced a bond issue for 149 million US dollars do not operate to be able to. Brilliance is now asking its creditors for a 90 day delay.
What effects the latest developments at Evergrande Auto will have on Trollhättan remains unclear at the moment. In Sweden they are still working on that Sango project. The self-driving robot car does its laps on the factory premises. Over the next 18 months, around a dozen robot taxis are scheduled to take part in their first practical test in Stockholm.